PLANTATIONS POLICY AND THE FACTORS OF PRODUCTION
By. Lalin I De Silva – Editor Bulleting
Plantations in Sri Lanka are a type of commercial farming where a single crop of tea, rubber, coconuts, sugarcane, cashew, cinnamon, timber, and oil palm is grown. This exercise is an attempt to understand the interventions required to harvest the untapped potential of the industry through the factors of production (land, labour, capital, and entrepreneurship) perspective to earn a tangible profit from the plantation industry.
The Land as a factor of production includes the natural resources used to create a good or service. The resources can be renewable resources like forests or non-renewable resources like oil, water, precious stones, minerals, and precious metals.
The plantation companies are entitled to use only above-ground resources like the crops cultivated but the below-ground assets are remaining unutilized which is a great loss to the crisis-hit national economy. The haphazard policy decisions taken purely looking from the political point of view on the above ground cultivations have already created more than Rs.27 billion losses for the RPC sector alone. The suspected over 30% crop loss due to untimely stoppage of much-needed fertilizer for large scale and labour-intensive plantation agriculture has also lost a sizable income of forex due to the national economy.
It is not a secret that Sri Lanka is absent important national policies when compared to many developed countries in the world. The agriculture policy, Biodiversity policy, Land policy, clean soil policy and national wage policy are a few that can be identified easily. If a common consensus can be arrived at by the parliament in identifying a reasonable GDP after due consideration of the budget deficits, then the national policies can be drafted to bridge the gaps by allocating resources meaningfully. We have had stagnating GDP of 80 billion USD for several years and borrowing has been a deadly option. Sadly, the country is not short of resources.
The national policy of the Plantation industry seems to be the biggest need of the hour of the industry as the policy has been absent from the aforesaid national policies since its very inception. The main aim of such a policy should be the sustainable growth of the industry. The Plantation policy will also help to attract FDIs. The leasehold rights of the RPC sector could be increased to 99 years as Tea, and Rubber crop cycles alone are running into 30 years of each crop. Investor confidence must be looked at in business decisions.
The policy also will have to address issues arising from the Life Cycle analysis of all crops cultivated at present. We are happy that the ministry has started on this, but the exercise must be completed soon. The degree of the need for the Plantation policy is well visible in the following chart. Although the numbers published below speak of a very low level of around 2.7% contribution to the GDP, these numbers have been unable to capture the value addition component fully. The Ministry is trying its level best to get the relevant data collected for some time now.
The GDP contributions
The labour is responsible for transforming resources into goods or services available for purchase. The outmigration trend of the RPC sector from 300,000 employees in 1992 to a little over 110,000 as of today is alarming. Once the policy is developed it is going to be easy to distinguish workable annual revenue goals. This will lead to the identification of the skill inventory of the employees of the industry. This will help the National Institute of Plantations Management to deliver objectively driven skill transfer programs to all categories of employees such as the daily paid category of employees and monthly paid categories. Also, the industry will be able to generate high-value jobs in the information age. With the residential workforce with plenty of talents and logistics inbuilt such as infrastructure, the Industry is a potential candidate for an influx of FOREX. In the modern world, human capital is an asset that can propel economies but an enabling environment must be created.
The capital is the company’s physical paraphernalia and the money it uses to buy resources. The need for a cash injection to gain from the transformation of the agriculture age to the industrialization age is very much urgent. The industry needs funding for objectively driven R & D programs to develop high market products with advanced technologies into attractive markets. Climate-smart agriculture is another area huge investments are urgent.
Entrepreneurship is the secret sauce that combines all the other factors of production into a product or service for the consumer market. An example of entrepreneurship is the evolution of the social media behemoth Meta (META), formerly Facebook. Another example of entrepreneurship is Starbucks Corporation (SBUX). The retail coffee chain needs land (prime real estate in big cities for its coffee chain), capital (large machinery to produce and dispense coffee), and labour (employees at its retail outposts for service). Entrepreneur Howard Schultz, the company’s founder, provided the fourth factor of production by being the first person to realize that a market for such a chain existed and figuring out the connections among the other three factors of production.
While not directly listed as a factor, technology plays a vital role in influencing production. In this context, technology has a broad definition and can refer to software, hardware, or a combination of both used to streamline organizational or manufacturing processes. Plantations are heavily dependent on spatial information although such are not used objectively. Satellite-based monitoring is one such catalyst for sure. The Ceylon Planters Society which comprises working planters on the ground has submitted a wire frame indicating the 10 billion USD earning potential per year. The goal was set by considering the factors of production including the accelerator, and technology.
Our collective aim through the compilation of facts above was to lobby for the much-needed national plantation policy and regulation without which the industry cannot make a required impact on the GDP that is crying for forex. We believe that our appeal will be heard this time and acted upon quickly as possible. The Ceylon Planters are always ready to shoulder the wheel. Let us put our best foot forward to regain Sri Lanka.
PLANTATION BIZ SNIPPETS
By. Lalin I de Silva – Secretary General / Editor
NIPM Alumni Association webinar Discussion
The Alumni association of the National Institute of Plantation Management held a webinar recently to discuss the “Role of the plantation industry to strengthen Sri Lanka’s economy.”
This webinar was organized by the Association’s recently appointed committee in line with their policy to share knowledge with members and stakeholders.
Industry experts, Dr. Dan Seevaratnam were the keynote speaker and Dr. Roshan Rajadurai served as a panelist. Senior Prof. Aruna Kumara, from the Department of Agriculture at the University of Ruhuna joined as an external resource person. NIPM Chairman Asoka Siriwardena and Director / CEO Dr. Prasad Dharmasena also participated in the discussion as special invitees. The Moderator for the session was NIPM Alumni Association President Yajith De Silva.
During the webinar, Dr. Seevaratnam said, “The current plantation model is not viable; we can’t live in the past and expect different results in the future”. Further, he said at the discussion “For decades, Sri Lanka has enjoyed a reputation for Ceylon Tea but that is eroding fast and it is not too late for the industry to realize that its survival hinges on its ability to differentiate Ceylon Tea as a high quality product.”
Dr. Rajadurai said, plantation workers, particularly the youth are unhappy to work in the plantations are considering migration due to traditional approach and dignity of labour. He further said, to grow the plantation economy, Sri Lanka needs to generate more produce for export.
The Ceylon Planters society wish to congratulate Yajith and his newly appointed committee the webinar for this highly timely opportunity given for a much needed discussion on how our plantation sector needs to adapt for positive change and responsible policy making to bring up this vital and valuable sector of our economy.
NIPM & DILMAH INTRODUCED TEACHING MODULE
Dilmah, the family tea company initiated collaboration with the National Institute of Plantation Management to develop and produce a teaching module based on the History of the Ceylon Tea adding a new dimension to the current NIPM Syllabus.
Dilmah’s History of Ceylon Tea initiative is another aspect of the commitment of Mr. Merril J. Fernando, the founder of Dilmah, to Ceylon Tea and it’s long term sustainability. Instruction in the new module was delivered by David Colin Thome, the Editor of Dilmah’s History of Ceylon Tea website (HOCT). Veteran senior planter, Dr. Dan Seevaratnam also participated.
Apart from the educational aspects of the history of the plantation industry, the module will seek to highlight its other interesting features which made the industry such an attractive profession for the current custodians of the plantations industry to learn the evolution of the industry, its culture, technologies and operating systems. History will also enable the present planters to trace the evolution of negative legacies and develop remedial strategies to minimize impact and to correct anomalies. In short, the history will inform and educate the future.
The Ceylon Planters society, appreciate the contribution made towards the Tea Industry by Mr. Merril and his son, the CEO Dilmah Ceylon Tea Company Mr. Dilhan for its sustainability of the industry. It was Tea which brought it global prominence.
JAMES FINLAY DIVESTS CONTROL OF HAPUGASTENNE AND DAPUSSELLAWA PLANTATIONS TO BROWNS
James Finlay’s, a Scottish company with nearly 127 years long presence in Ceylon now Sri Lanka has divested two listed Regional Plantation Companies, Hapugastenne and Udapussellwa to Browns Investment PLC which has acquired shares on the Colombo Stock Exchange.
Browns Investments has a successful track record in operating plantation business. Browns own Maturate Plantations, one of the largest tea producing companies consisting of 19 individual estates across an area of over 12,000 hectares and over 5000 workforce.
Udupussellawa owns 11 thriving estates and 19 estates come under Hapugastenne. They have appointed four new Non-Executive Directors; Dr. Pradeep Uluwaduge, Kamantha Amarasekera, Sujeevani Kotakadeniya and T. Dharmarajah.
Dr. Pradeep Uluwaduge has been appointed as Chairman of both plantations and Mr. Anusha Suhanda Perera has been appointed as Executive Director of both plantations.
Mr. G. D. V. Perera who is a veteran senior planter and former Chairman of the Planters’ Association has joined Browns Plantations as a senior Consultant effective April 1st, 2022.
On behalf of the Ceylon Planters Society, we congratulate them and wish all the very best and all success in their future endeavors.
We also assure them our member’s fullest corporation at any given time.
THE CEYLON PLANTERS SOCIETY
PEACEFUL PROTEST OVER THE CRISIS
Lalin I De Silva-Secretary General / Editor
The planters gathered at Nuwara-Eliya on the 8th April 2022 to join in the country-wide protest with all the other professionals to convey our grievances we are facing.
Mr. Dayal Kumarage, the president of the Ceylon planters Society, provided the leadership maintaining law and order and facilitating freedom of expression.
We must say that, we are not divided by color or party politics. We only represented the planting community and our entire membership of planting Executives. The planters joined this protest holding placards and the CPS banner during the protest.
The Government’s failure to supply fuel to plantations together with continues power disruptions without prior intimation the plantation sector is of serious concern as it is hampering daily operation of production and transportation.
Due to the lack of fuel, all leaf and latex transport operations have been severely impacted and there is insufficient fuel to operate stand by generators. If the Authorities concerned do not take meaningful solutions immediately the estates will no longer be able to continue operations as usual. Thereby, the production cost of tea will go up by around 30%.
Although the government has taken a decision to restrict imports in somewhere May last year, even after one year the RPCs and the Smallholders faced severe challenges in obtaining sufficient inorganic fertilizer and agrochemicals.
Tea plantations witnessed visible discoloring and a drop on volumes, while the rubber is hit with “circular spot disease” due to lack of fertilizer and agri inputs ban. These are essential for the sector. Still we have not provided with a solution with regard to fertilizer.
Further, we have to contend with higher fertilizer prices which will additionally create issues. Hence, it is vital that such situations are avoided in the future.
The decisions to ban imports of agricultural inputs such as weedicides, fertilizer, fungicides and pesticides have not been available for nearly one year. As a result of the cost of production of one kilo of tea will cost nearly Rs.750 to 800 approximately comparing to a Net Sale Average around Rs.700 to 725 to date. Further, it will hamper the yields and the quality of the tea.
In this scenario, the planters do not have any other weapon but the only weapon they have is to protest. That is why the planters joined a silent protest at Nuwara- Eliya. We urge the Authorities concerned to look into our grievances and for the plantation sector to continue operations, uninterrupted power and fuel to be provided as priority.
We salute our president and all those who have participated in this protest to show our solidarity and our strength to the authorities to open their eyes to take some immediate remedial measures to safe guard our industry and as a whole the economy of our country. A special word of thanks goes to our Regional Chairman Nuwara-Eliya, Ravindra for his hard work in making arrangements for this protest which was well organized.
The leaders must be the role models for the future. They must lead from front and practice what they preach if such initiatives are to bear fruit and be sustainable.
IF WE ARE UNITED WE WILL STAND AND IF WE ARE DIVIDED WE WILL FALL.
JANUARY –APRIL TEA EXPORTS DECLINE
The export volume of the first four months of the year 2022 is 82million / kgs , which is approximately 5% lower than the same period last year.
According to the Tea Board, the Tea industry is showing remarkable resilience to bounce back rapidly during this national crisis period. The Tea Industry is almost 155years old and the Industry has faced several challenges especially in the last four to five decades, i.e. youth unrest in 1971 conflict from 1983, again 88/89 youth unrest, tsunami in 2004 and the covid pandemic from 2020.
RUBBER PLANTATIONS IN DISEASE CRISIS
The Rubber plantations have been hit by a fast spreading disease that could cause about nearly 10 percent crop loss. The growers are waiting for recommended pesticides to be imported that could be expensive to apply considering the drone equipment required doing so.
The pesticides Hexachonozole and Carbendazin were available somewhere in December last year are currently not available in the market. The current foreign exchange crisis could be a reason for the lack of availability of the required chemicals.
However, according to the Pathologist at the Rubber Research Institute Dr. Sarojini Fernando, the loss can be around 10-20 percent at the International level and it could be up to 40 percent.
In 2019, the rubber plantations were identified having Pestalotiotsis or the Pesta disease but scientists found another disease last November, a circular spot leaf disease identified as Colletotrichum.
According to Dr. Fernando, these diseases are not new to Sri Lanka but all other rubber producing countries such as Malaysia, India, China and Indonesia were also experience this diseases.
Three new pathogens had been identified and research work is ongoing and recommendations have been provided to stop further spread of the disease and minimize economic loss.
Dr. Fernando has further told that chemicals are required by May, when re-foliation or new flushes of leaves appear and also the new disease can be observed and it can be applied when the leaves are mature. She has mentioned that this disease was most prevalent in wet areas.
RUBBER PRICES HIT ALL- TIME HIGH
The prices have reached an all- time high with top latex crepe rubber prices having hit Rs.1000 per kilogram at the last auction held on 26th April.
According to Forbes & Walker Commodity Brokers, the rupee devaluation against the Us dollar has resulted in strong demand for all rubber grades. The prices of the top latex crepe that was Rs.650 in the beginning of the year (January 2022) reached Rs.1000 in the last auction.
According to their Director Mr. Damith Perera, there were several factors contributed to the auction prices to increase and a key contributor was the fluctuation of the weather patterns.
We draw our attention to all our rubber planters to make use of this opportunity to maximize their profitability.
At the same time, we appeal to all the authorities concerned to look into the shortage and deterioration in the availability of fuel and electricity in the plantation sector and several other key requirements of the plantation industry.
The plantation sector has not been provided with a solution with regard to agri inputs required such as fertilizer, pesticides, weedicides, herbicides and fungicides to mitigate disease’s specially to control the diseases in rubber plantations.
ELPITIYA PLANTATIONS RECEIVED TWO AWARDS
Elpitiya Plantation was selected as one of the “Ten Best Integrated Reports” at the CMA Excellence in Integrated Reporting Awards 2021.
Elpitiya Plantations PLC was also crowned as winners in the Plantations Sector.
Elpitiya Plantations PLC managed by Aitken Spence Plantation Managements PLC had also received the Silver Award in the Plantation sector, at the 56th Annual Report Awards organized by the Charted Accountants Institute of Sri Lanka.
The Ceylon Planters Society congratulates the Managing Director, Dr. Rohan Fernando, the Director / Chief Executive Officer Mr. Bhathiya Bulumulla and the other officers on their performances for having been recognizing among many other reputed organizations.
We wish Dr. Fernando, Mr. Bulumulla & his team all the very best in their future endeavors.
APPRICIATIONS BY LALIN .I. DE SILVA -EDITOR
- MANTHI DELVITA
Former President of The Ceylon Planters Society.
Mr. Manthi Delvita, former President of our society passed away at the age of 86 years.
Manthi, as all his friends call him, joined the Ceylon Planters Society long time ago may be somewhere in early nineteenth sixties and was always a staunch CPS man. Even when he was the Regional Chairman of Uva, he had to contend with erring Superintendents and Assistant Superintendent’s who his fellow CPS members were. He saw that discipline was upheld but upheld within the framework of justice and fair play. I say this, he was the Chief Executive Officer at Kahawatta plantations when I was the Superintendent at Westhall Estate, Nawalapitiya which came under Kahawatta plantations plc.
Mr. Delvita been an active member of the Ceylon Planters Society has held office in the higher echelons of the CPS and later he became the president of its Golden Jubilee year. We are all aware that he worked tirelessly in his endeavors to obtain the very best for the membership of the society.
Mr. Delvita has done a splendid job during his period of stewardship as the president and his contribution towards obtaining the stage 2 letter is commendable. Mr. Neville Athukorala, who was his deputy president always reminds us the effort Mr. Delvita made. Later Mr. Athukorala succeeded him as president.
I had the good fortune to work under Mr. Delvita and also to work together as members of the Regional Scientific Committee, Kandy Region of Tea Research Institute. Whilst attending in those meetings I learnt many things from him. He was an exemplary and excellent Planter.
He was a simple man who led a simple life.
He faced many challenges without fear or favor. Mr. Delvita was straight forward voicing honest opinions and offered constructive criticism where necessary.
We convey our deepest sympathies to all his family members. Although you parted early I as a Christian pray that may the turf lie gently over you.
I can do no better than saying that he may come to eternal rest and reach Nirvana.
It’s with deep sadness that we announce the peaceful passing of Mr. Asela Abeywarna.
He was an active member of the Ceylon Planters Society and served as an Executive Member.
Your presence we miss, your memories we treasure, loving you always, forgetting you never.
He was a simple man who led a simple life. He was straight forward and voicing honest opinions and offered constructive criticism where necessary at the Council and Exco meetings.
We convey our deepest Sympathies to all his family members.
I can do no better than wishing him eternal Rest and Nirvana.
MAY HIS BLESSED SOUL REST IN PEACE
Tribute to Mr. Nimal Dias Weerasinha
By Lalin .I. De Silva -Editor
Its with deep sadness that we announce the peaceful passing of Mr. Nimal Dias. Weerasinha, former Senior Planter at the age of 79years
Mr. Weerasinha was an excellent planter as well as an active member of the Ceylon Planters Society being the Regional Chairman of Badulla Region (Uva)
When he was the Regional Chairman, he not only attended all Branch and the council meetings he made an valuable contribution towards negotiating the stage 2 letter and the payment of arrears to Planters.
In 1983, when the riots started in Welimada, he was the Superintendent of Welimada Group and I was the Assistant Superintendent of the neibouring Estate Downside.. My Boss had to leave the Estate at the very beginning of the riots and I had to look after the estate.After a few days, when the situation was normal, the Janatha Estate Development Board appointed Mr. Weerasinha as overlooking Superintendent and myself as Acting Superintendent.
No sooner Mr. Weersinha received his letter, he called me and advised me to run the property the way I want and if there is any problem to contact him.Every evening, he called me and discussed about the estate progress.
After few months the JEDB appointed a permanent Superintendent to Downside. One day, the Chairman of the JEDB Badulla Region, Mr. Eddie Jayawardhana asked me to see him in his office. When I went there, Mr. Weerasinha was with the Chairman in his office.To cut short of my story the Chairman told me why he asked me to come and said, Mr. Weerasinha has recommended me for a promotion and the chairman assuad me that he will fulfill it at the next opportunity.
Within two months, I was appointed as Superintendent to Shawlands Estate Lunugala and at the same time Mr. Weerasinha was transferred to Hopton Group once again not only we became neibhours as well as good friends.
I convey my Deepest Sympathies to his wife and the two sons and to all his family members
MAY HIS BLESSED SOUL REST IN PEACE